What if I told you that Christmas lights in the United States use more electricity than Bitcoin mining does? Or what if I told you Bitcoin (BTC -3.16%) uses half as much energy as the banking or gold industries?
It is also true that Bitcoin mining uses more energy than the entire country of Switzerland. There is no doubt that it is a lot of energy.
The discussion here isn’t to justify Bitcoin’s energy usage. Rather, the aim is to shed light on how Bitcoin will become a green technology and that the recent portrayal of Bitcoin as a waste of energy will become a moot point. Investors should appreciate that when energy usage stops being controversial, Bitcoin’s price will no longer be dragged down by environmentalists and politicians alike.
Critics are always the loudest
Over the last few years, the king of cryptocurrency has found itself in the crosshairs of mainstream media due to the energy-intensive process of mining. It has become common for any major news outlet to write a hit piece on Bitcoin’s energy usage.
Yet it seems that Bitcoin’s transition to a greener technology has not received as much attention.
There are numerous examples of how Bitcoin mining has evolved into an eco-friendlier technology. For example, Bitcoin miners are incentivized to use the cheapest form of energy because that means more profits. And as renewable energy sources become cheaper, they will begin to use those.
Luckily, experts estimate that renewable energy capacity will be 50% higher over the period of 2021 to 2026 than it was from 2015 to 2020. As this energy becomes more common, Bitcoin will be a renewable currency — something our banking and gold industries can only dream of.
Bitcoin changes the narrative
Other interesting trends have begun to unravel more recently. One of the world’s most valuable oil producers by market cap, ExxonMobil (XOM 2.97%), started to power Bitcoin mining computers with unused natural gas that would have otherwise just been burned off. While not entirely green, it is an innovative way to put unused energy to use.
Even local governments are joining in. The City of Fort Worth, Texas, announced that they would begin mining Bitcoin. Knowing that this could be perceived poorly, officials made it a priority to use mining equipment that doesn’t use a lot of energy. The three machines they chose will use less power than the average household vacuum.
The most compelling development comes from one of the world’s largest Bitcoin mining companies, Marathon Digital Holdings (MARA 12.22%). In an announcement last month, the company promised to be carbon neutral by the end of 2022.
A better future
It will only mean great things for Bitcoin’s price if this momentum continues. Imagine a decentralized currency that is carbon neutral or runs completely on renewable energy. That is a true modern marvel.
Industry leaders like Exxon, Marathon, and even the City of Fort Worth are showing the world the possibilities Bitcoin has to offer. More will follow. It won’t be overnight, but as the digital currency revolution becomes reality, Bitcoin should ascend to new highs in due time.
Given the recent pullback, investors should consider a long position in Bitcoin at this time. Even if Bitcoin is in the red now, I believe it will be green for the long haul.